PC desktop market is dieing, Time to move on and write another record. People have no reason to upgrade (an old core 2 duo is more than enough for most of the population) and tablet sales are taking away from those that might be even considering it.

I upgraded about 4 years ago and haven't felt the need to buy much since then. The software I use isn't that demanding, it used to be games that kept me upgrading but those mostly bore me nowadays and the few that I play are either old, or designed to work on ancient consoles. I remember a time when I used to upgrade my PC to something 'decent', and it would only keep me happy for about 8 months and then I used to start getting games that crippled it. I would struggle on but a year or two later and I used to get fed up of running everything on lowest settings and I would upgrade. But it doesn't work like that anymore.

It's sadly not a cycle. Its evolution.
Go and try to buy a hi-fi system in the main stores and you will struggle. Everything is stand alone like the Bose docking stations or Sonos wireless system.
To an audiophile this is disgraceful. They will still go and buy seperates from a specialist shop.
But for Joe Public, its fine.

PC's are going the same way, There will still be a market for us, the enthusiast, but Joe Public is moving towards Tablets, smartphones, etc.

I don't believe the PC will die. I do believe it will become harder to get stuff, and the prices may rise to reflect the lack of buyer power.
And I don't believe it will have much effect on the gaming industry. After all, 90% (made up figure) of all PC's sold were hopeless at gaming on any way.

The new XBOX will probably end up driving PC sales more than Windows 8, PC's have been held back due to publishers wanting to publish on console and PC (lowest common denominator).
I cant think of many PC exclusive games in recent years.

Anyone who thinks that Windows has any influence over the sale of computers probably also thinks that car tyres dictate the sale of cars.

As if people are motivated to splash out several hundred bucks on a device just because they like the look of its OS, or would refrain from doing so because they don't. People buy computers because they need a computer. Then they learn how to use it. Generally they don't want to learn, so if they don't buy a computer it's because they found a device that serves their needs without having to. Tablets and mobiles tend to be such devices.

And as r3loaded says: there is a recession going on (don'cha know) and computers have been so powerful since the last five years that there is little reason to upgrade unless you are a hardcore geek.

Name me a single office anywhere in the developed (and most of the developing) world that isn't filled with computers.

That's a lot of offices.

How many households still use a PC on a regular basis?

Most of them.

Sales are slowing down because those who currently have a system which does everyhting they need it to have no need to buy another. There has been a huge boom over the past ten years and now the market is saturated with hundreds of millions of perfectly capable desktops, which only get replaced when they die.

I thought the bulk of pc-sales were companies.
Win8 isn't going to help that market....it's not really a OS for production.
Dell sales going down would reflect.this.
Tablets,nice as they are for the consumer, are also not used in office environments.

Given most people use there PC's for facebook and 'porn' there is little need to keep buying new pcs as the last generation of chips like the i3, i5 and i7s are more than capable of managing the every day users need, its only gamers who require upgrades now.

Anyone who thinks that Windows has any influence over the sale of computers probably also thinks that car tyres dictate the sale of cars. .

That analogy would apply, if every time a new tyre came out all the car manufacturers adopted it and spent millions advertising how much better it was than the old tyre - which is what happens when Windows comes out: manufacturers launch all-new advertising campaigns espousing the benefits of their new machines with Windows 8. I have no figures in front of me, but I'm willing to bet the increased advertising leads to increased sales - as increased advertising nearly always does.

I might get in touch with IDC, see if they'd be willing to share historical data points - without making me pay thousands for the privilege. It'd be interesting to see if PC sales, mapped against time, do spike when a new Windows copy is released or, as you predict, stay flat barring regular variations like the Christmas sales period...